We need a plan to lower the stablecoin interest rates on the money market.

New pool - vDOT vs iBTC

Request for new pool - vDot vs iBTC

Earning interest rewards on a positive net APY

Release date for RunTime update (Ledger)

- Polkalottery is a lottery platform coming to the Interlay network.  
- It helps bring more users and activity to Interlay.  
- 5% of ticket sales will buy and burn INTR tokens, helping their value.  
- It will reward the Interlay community with airdrops and prizes.  
- Polkalottery has already sold over 100,000 tickets on other networks.  
- It will take about 10 days to set up and 6 weeks for the airdrop.  
- This integration will show Interlay’s role in the Polkadot ecosystem.

MIGA (Make Interlay Great Again) Polkalottery on Interlay

Interlay and Pendulum have opened a bidirectional HRMP channel. 
Pendulum wants to discuss registering their assets on Interlay. 
They aim to register Circle EURC.s and XLM.s tokens on Interlay's asset registry. 
They propose creating a money market for lending and borrowing with these tokens. 
Pendulum's focus is on integrating Circle’s EURC.s into Interlay’s lending markets.

Pendulum's Asset Registration and Use Case on Interlay

Interlay is proposing to increase the Premium Redeem Fee, Punishment Fee, and Liquidation threshold for all vault collaterals by 3%. 
The Premium Redeem Fee will increase from 5% to 8%, the Punishment Fee will increase from 2% to 5%, and the Liquidation Threshold will increase from 105% to 108% for all vault collaterals. 
This proposal is being made because there is high demand but no capacity to mint more iBTC, which has driven iBTC to trade at a 6% premium. 
The long-term solution is to find ways to increase iBTC vault capacity, but in the short-term, modifying the vault parameters will keep the system in balance. 
The suggested threshold updates will bring all vaults under 120% collateralization back above 120% and should see premium redeems, losing some collateral.

Increase PremiumRedeemFee, PunishmentFee, and Liquidation threshold for all vault collaterals by **3%**

Is IETH possible in the future?

- Interlay is considering using tBTC as an additional collateral option.
- tBTC is a wrapped Bitcoin solution on Ethereum.
- Using tBTC as collateral could increase the availability of iBTC.
- It could also foster a more decentralized network and strengthen Interlay's connection with the DeFi ecosystem.
- This proposal is open for discussion.

Enable tBTC as Vault Collateral

- Interlay team is focusing on BOB, leaving INTR holders with no say in the decision-making process.
- INTR's value is decreasing and there is no marketing being done by the team.
- Going public or getting funding is the best solution, but community members can help with marketing.
- One idea is to have a community campaign where people write articles or create videos about iBTC and receive INTR tokens as a reward.
- The articles should be at least 2,000 words and the top 10 will receive an equal share of extra INTR tokens.

How to market through community events

1. The price of INTR keeps falling and the community is not happy.
2. A major INTR holder has declared that they will vote against all proposals until certain conditions are met.
3. This individual claims to hold nearly 1.8 million INTR, which is less than 3% of the total, but it poses a significant threat because many proposals are expected to fail in the future.
4. The original purpose of the INTR token is for governance purposes, but many users are only focused on staking rewards.
5. Efforts are needed to increase active users, and two radical proposals have been suggested to improve the quality of users.

Variable system of staking interest rates that takes into account governance participation rates, number of votes, etc.

Interlay is looking to increase its vault capacity by allowing additional tokens to be used as collateral for its iBTC vault system.

This will allow token holders who prefer to hold other ecosystem tokens to contribute their collateral to the Interlay vault system.

Bifrost BNC and HydraDX's HDX tokens are suggested to be immediately enabled as vault collateral, with Phala's PHA also being considered.

InternalError's `collateralization-analysis` script has analyzed historical token prices to calculate safe collateralization thresholds for each token.

The suggested safe_mint thresholds for HDX and BNC are 195% and 160% respectively.

Enable Parachain Tokens as Vault Collateral (BNC, HDX)

Test

Stellaswap is a decentralized exchange on Moonbeam, which is where most users in the Polkadot ecosystem are. They have a unique offering on Polkadot with a Uniswap v3-style concentrated liquidity dex. They want to use INTR tokens as incentives on their INTR-DOT pool for three months, which could be renewed. This will get the Interlay brand in front of more users and hopefully lead to conversions among new Polkadot users. The projected TVL in the Polkadot proposal did not account for any INTR rewards. The suggested token quantity has been suggested by Stellaswap, but could be adjusted based on community feedback.

Stellaswap <> Interlay Governance Proposal

- A person listened to something called AAG and wants to support Interlay, a secure BTC derivative vault project.
- They think that financing visibility is not necessary for Interlay and that the project needs more funding to attract liquidity.
- The person suggests that Interlay should have at least 100 BTC in reserves to encourage the incentive of the project.
- They believe that promoting the possibility of working on the number 1 digital store of value is directly promoting Polkadot as a real secure layer O for BTC.
- The person thinks that this project could favor the entire ecosystem, Polkadot, its technology, the relaychain for the security aspect, its economy, and its security.

ADD MORE BTC TO INTERLAY TO HELP AND fFOR THE PROTOCOL WILL HAVE MORE USER AND DOT MORE TRESORY IN BTC INDIRECTLY

- The person noticed a problem with the display on the Lending/borrowing part of the interface.
- The Total supplied part of the market LENDING MARKET section and the BORROW MARKET part of the borrow section show zero or zero O.OO value.
- The display eventually appears but it takes a while.
- The person is notifying the team of the problem.
- Apart from this problem, everything else works perfectly.

DASHBOARD LENDING/BORROWINF TROUBLE OF DISPLAYING

Add stablecoin (USDT/USDC) to HRMP channel with HydraDX

- Polkadot Crowdloan is releasing a significant amount of DOT liquidity soon.
- vDOT is a good solution for earning staking rewards and participating in DeFi.
- This proposal suggests a co-Incentivized initiative between Bifrost and Interlay for the vDOT lend and borrow market.
- The target supply is $3,000,000 and offers a 10% incentive APY for a one-month period during the unlock event.
- The proposal includes benefits such as BNC-INTR buyback, conversion of vDOT to BTC Vault, and continuous incentives for Interlay Treasury through vDOT fees.

Incentivizing vDOT Lend Market During The 2nd Batch of Crowdloan DOT Expried

Implement early unlock on INTR staking

Give better rewards for INTR vaults as incentive

SubSquare has proposed changes to improve the economic security of the bridge and vault. The changes include reducing the slashing punishment for vaults from 10% to 2% and increasing the minimum collateral for all vaults to $1,000 * secure_threshold. The proposal aims to prevent the collateral ratio from falling below 100% and to ensure profitability for premium redeems and liquidations. The proposal also suggests using $145 of the DAO treasury to buy iBTC and burn under-collateralized iBTC in the liquidation vault. This would result in a loss of about $15.51 for the treasury.

Improving Vault and Bridge Security Parameters

Interlay is a platform that connects Bitcoin and other cryptocurrencies to DeFi. They have completed their expansion from BTC bridge to DeFi hub over the last few months. The end of the DeFi hub incentive program marks a good time to assess the INTR tokenomics and debate improvements and next steps. 

The goals of the INTR token are transaction fees, governance, liquidity bootstrapping, and feature access. To successfully navigate the current market and challenges faced by the ecosystem, the goal of a tokenomics update should be to keep LPs and vaults incentivized to provide capital to the bridge and DeFi hub, reduce sell pressure on the INTR token, and improve liquidity of the INTR token.

Three possible action items are identified, which help achieve the goals above. These include redirecting part of the INTR rewards for vaults, LPs, and lending supply to staking, depositing INTR into HydraDX’s Omnipool to improve liquidity, and removing token inflation to limit the total amount of INTR to 1bn.

LP rewards are coming to an end, and the community must decide on whether or not to prolong incentives at the current rates, cut the incentives down, or remove them altogether. The effect on the price, created by the selling pressure, is leveraged by the low liquidity of the token. 

If we want to maintain the DeFi hub and ensure there is sufficient liquidity for efficient trading and borrowing/lending, then we cannot completely remove LP rewards. One suggestion is to redirect 50% of the token emission currently distributed to vaults, LP, and lenders to INTR stakers.

Another suggestion is to deposit a considerable amount of INTR tokens to HydraDX’s Omnipool via treasury to increase liquidity. 

As the third action item, we would like to bring to discussion removing the planned inflation of INTR after year 4, effectively limiting the INTR supply to 1 bn.

Call for Discussion: Next Steps for INTR Tokenomics

- A proposal has been made to change the way rewards are given out for certain cryptocurrency transactions.
- They want to deposit a certain amount of INTR into HydraDX to create liquidity and stop paying incentives for a certain pool.
- They want to remove the 2% inflation after year 4 of the token launch to make INTR deflationary.
- They want to redirect 50% of the rewards for most parts of the transactions.
- The yield for certain transactions will change if this proposal is accepted.

Poll: Next Steps for INTR Tokenomics

Bifrost is a platform that allows people to earn rewards by staking their cryptocurrency. They have a special type of token called vDOT that represents staked DOT on the Polkadot Relay. vDOT can be used to earn rewards while participating in DeFi. Interlay is a lending market that allows people to earn money by lending their cryptocurrency. They want to add vDOT to their lending market so people can earn even more money. By using vDOT, people can also do something called leveraging staking, which means they can earn even more rewards by borrowing and lending vDOT.

Adding vDOT into Interlay Lend Market

- Polkadex is a cryptocurrency exchange for DeFi.
- They want to connect with Interlay to make it easier to trade iBTC and other assets.
- This will create more opportunities for trading and borrowing/lending.
- They are asking if anyone has any concerns before they make the connection.
- They want to make sure everyone is happy with the proposal.

Open an XCM channel with Polkadex

Interlay is planning to launch a DeFi hub with a DEX, lending market, and bridge, and is seeking community feedback on the plan. The goal is to attract enough liquidity to ensure efficient usage of the DEX, lending market, bridge, and the highly anticipated iBTC staking product. To achieve this, the plan proposes incentivizing the lending markets and liquidity pools and ensuring sufficient supply of DOT into the lending market. The proposed parameters for qDOT and qUSDT as vault collateral are also provided. The DEX will focus on the iBTC/USDT, iBTC/DOT, and INTR/DOT pools, and the lending market will focus on the iBTC, USDT, and DOT markets. The proposed incentives for the DEX and lending markets would run for three months, and the target TVLs are $1.6m for the DEX and $1.4m for the lending market.

Interlay DeFi Hub Launch Discussion Post

1. RPC nodes are used to connect to networks like Interlay and Kintsugi.
2. Dwellir and OnFinality are providers of RPC nodes.
3. It's good to have two providers for redundancy.
4. The treasury should not overspend on RPC node provision.
5. OnFinality and Dwellir have shared their proposals for RPC node provision.

Future of RPC node providers

Dwellir AB is a company that provides Remote Procedure Call (RPC) infrastructure services for over 40 networks, processing more than 500 million requests daily. They own and operate their bare metal machines across four locations in Europe and Africa, and will soon launch in the US and Asia. 

Dwellir offers decentralised operations, streamlined node management, low latency, high access, and fair pricing. They believe in a fair pricing policy that balances quality and affordability. 

Their quarterly costs for operating Interlay/Kintsugi RPC services will be approximately $2284, which is reduced from $4000. They are committed to ensuring ongoing costs and predictable cost structures. 

Dwellir is dedicated to fostering the growth of the Interlay/Kintsugi ecosystem and supporting their work without compromising financial sustainability.

Dwellir - Your Decentralized RPC Infrastructure Partner

OnFinality is a service that helps people access new blockchain protocols by reducing the costs of running a full node. They manage all the nodes for their users and distribute them across the world to achieve global scalability. They also provide access to one-click deploy dedicated nodes to any cloud of your choosing.

OnFinality has made a lot of improvements to their Ultimate API service, focusing on performance/reliability, providing more value, and cost optimization. They strive for a minimum of 99.99% reliability and have invested in a team dedicated to optimizing their application gateway and caching layer to provide the fastest possible service for their customers.

OnFinality has served a combined total of over 2.5 billion requests and accumulated almost 9,000 GB of data egress. The highest daily responses in a single 24 hour period for Interlay occurred on the 21st of December 2022 with 92,949,041, and for Kintsugi on the 20th of December 2022 with 66,337,717.

OnFinality has lodged proposals to the Kintsugi treasury, which have always been successful. They plan to continue providing RPC API support for Kintsugi and Interlay and will separate Kintsugi and Interlay costs and lodge two separate treasury proposals referencing this original discussion post.

OnFinality High Performance Public Infrastructure

Secret

1. There are incentives for iBTC pairs in different Dexs paid in INTR.
2. The proposal is to provide INTR as liquidity in the Omnipool to access a large number of assets without the need to incentivize separate pools.
3. The Interlay community can manage the fees generated through governance, opening up different possibilities.
4. The Omnipool currently has 10 iBTC as liquidity, making it the best option in terms of slippage.
5. INTR could be used as an incentive in the Omnipool once Liquidity Mining is active and create a broader liquidity base.

INTR to Omnipool 

Interlay community had a proposal to build up the liquidity of iBTC and INTR in their new Pulsar AMM. 
The proposal passed with 88% "aye" votes but an XCM bug caused the transfer to fail. 
The TC committee decided to re-execute and fast-track the proposal, but this time the proposal failed. 
Now, the community has three options on how to proceed. 
They need to come to an agreement as the Pular pool was set to launch next week.

Stellaswap Liquidity Program - Vote passed, XCM msg failed, re-execution downvoted 

- A proposal was made to use treasury funds to incentivize a pool called iBTC/DOT pool on Arthswap.
- The pool aimed to bring iBTC into Astar network and qualify it as a collateral asset on lending/borrowing markets.
- The target liquidity of the pool was $200k USD, but it did not reach that level by the end of the incentive period.
- The Arthswap team refunded the unused reward allocation for INTR to the Interlay Treasury.
- The iBTC/DOT pool achieved its purpose of bringing iBTC to Astar community, but its performance was below expectations.

Performance review of iBTC/DOT pool on Arthswap

Interlay is a community that has created a bridge between Bitcoin and DeFi. They have shipped the first-ever fully decentralized and economically trustless BTC bridge called iBTC. Interlay v2 proposes to make access to decentralized BTC finance as easy as using an ATM by introducing native DeFi functionality to the network. They plan to create markets catering to Bitcoin holders and building deep liquidity in these protocols, enabling easy, one-click access to Bitcoin-centered DeFi use cases. They have released a whitepaper that provides a deep dive into the Interlay v2 architecture, covering consensus, infrastructure, DeFi, and application layers. They call the community to review this vision document and share thoughts, ideas, and suggestions. A first, raw alpha of the DeFi Hub is already live on testnet for experimentation.

Interlay v2: Bitcoin Finance, Unbanked

Here is a summary of the SubSquare post:

- The current Vault reward distribution model is based on how much iBTC has been minted with a Vault.
- This model is not fair, efficient, or beneficial to protocol growth.
- The proposed v2 model takes into account iBTC capacity, i.e., how much BTC a Vault can secure, unrelated to how much is already being used.
- The v2 model focuses on increasing minting capacity for new users ahead of the Interlay 2.0 DeFi hub launch.
- The new model incentivizes vaults to provide sufficient minting capacity to allow users to use BTC in DeFi and serves as exit liquidity for vaults who want to withdraw their collateral.

Recommendation for New, Capacity-based Vault Reward Distribution Model

- A new type of vault can be activated using USDT via Statemint as collateral.
- Currently, only DOT is accepted as collateral for vaults.
- USDT can be imported from Statemint via Interlay's Crosschain Transfer XCM.
- The proposed parameter configuration for the “USDT vaults” includes an initial collateral ceiling of 200.000,00 USD equivalent, secure collateral threshold of 155%, premium redeem threshold of 145%, liquidation threshold of 135%, and minimum collateral threshold of 150 USDT.
- The next step is to activate this vault type with the above parameters via an on-chain governance proposal.

Enable A New Vault Type With USDT As Collateral

Here's a summary of the SubSquare post:

- Vaults are important to the Interlay and Kintsugi networks because they secure BTC while kBTC/iBTC is being used in DeFi.
- The current KINT and INTR reward emission is too high and unsustainable, creating a negative feedback loop.
- The proposal suggests reducing collateral thresholds and adjusting Vault block rewards to be more sustainable while keeping incentives for operators high enough.
- Regular reviews and adjustments of Vault economics will be made to react and adjust for external/macroeconomic events.
- The expected result is a reduction in KINT and INTR emission, which will improve the economic stability and outlook of both Kintsugi and Interlay.

Recommended Adjustment to Vault Reward Schedule on Kintsugi and Interlay

Interlay Community Upgrade:

- Interlay is getting an upgrade on Thursday, October 20th.
- The upgrade will happen in the morning, between 8-10 a.m. UTC timezone.
- The upgrade will include changes to Vaults, Issue requests, and Collators.
- Kintsugi has already received the upgrade without any issues.
- More information about the upgrade will be provided on Wednesday.

1.19 Runtime Upgrade for Vaults Scheduled For Wed the 19th of October

SubSquare has launched iBTC and is now planning to integrate with Polkadot parachains. Here are the key points for a second-grade student:
- SubSquare launched iBTC and wants to integrate with other networks.
- They want to work with other communities to make decisions together.
- They are exploring different options for integrating iBTC with other networks like Acala, Moonbeam, Parallel Finance, and Astar.
- They are looking for feedback from the community to make decisions faster.
- They have a plan to launch iBTC on new networks in a specific order, starting with a decentralized bridge and ending with exploring further Dapp integrations.

DeFi: 2022 H2 community update

- The post talks about a new iBTC pool and other related proposals.
- The author doesn't think it's a good idea to reward users for using doubtful DEXes and tokens, especially during a market dip.
- The author suggests focusing on a long-term marketing strategy instead.
- They recommend only allowing iBTC/INTR pair on Interlay frontend and only rewarding stable pairs like DOT and USDT on other DEXes.
- The author suggests using some of the saved INTR tokens for better marketing to educate the community about the benefits of iBTC and the risks of other bridges.

INTR incentives on DEXes

- INTR tokens are used for voting but only a few tokens are actually used for it.
- Everyone benefits from the decisions made by those who vote.
- To encourage more active discussion, the staking rate could be increased for accounts that participate in voting or decreased for those that don't.
- If accounts are only getting rewards from staking without voting, it goes against the original purpose of the system.
- A difference of 10-20% in staking rates could clarify the benefits of voting.

Modification of staking rates to take into account participation rates in voting

- Interlay and Moonbeam want to open an XCM channel to facilitate transfers and cross-chain developments.
- This will allow for many potential applications and use cases, such as liquidity pools and using iBTC on Moonbeam.
- Interlay wants to know if there are any strong arguments against opening this channel.
- If there is no strong opposition, they will proceed to open the channel and fast track any needed proposals.
- The author of the post is Alex from Interlay.

Open an XCM Channel with Moonbeam

- Interlay is a network that allows people to use Bitcoin on other blockchains.
- Vaults are important participants in the Interlay network that ensure Bitcoin remains locked on the Bitcoin blockchain while being used on other blockchains.
- Vaults receive rewards in the form of INTR tokens for their work and risk.
- The rewards will be distributed over four years, with the most rewards given in the first year.
- The launch date for iBTC Vaults is suggested to be August 10th.

INTR vault rewards can now be activated

Interlay is proposing to link INTR rewards to iBTC TVL to ensure sustainable operation and growth of Vaults. INTR rewards are currently not tied to iBTC TVL, which can skew incentives during the early stages of the network. The proposal suggests introducing an INTR/iBTC per block reward rate that can be updated via governance vote. The initial proposed value is 0.34 INTR per iBTC per block. The total INTR allocation to Vaults remains the same, and the INTR reward is still distributed proportionally among all Vaults based on how much BTC they have locked compared to the total minted iBTC amount. The proposal can be fast-tracked on Tuesday, July 5th, if there is agreement.

Introducing an INTR/IBTC Reward rate

- Vaults are important for the Interlay network as they ensure BTC remains locked on Bitcoin while iBTC exists.
- Vaults lock collateral with the parachain to prevent misbehavior, and they take up liquidation risk as well.
- Vaults receive INTR as reimbursement for their risk and to protect themselves against hostile governance takeovers.
- Vaults only earn block rewards if they have BTC locked, and rewards are distributed based on each Vault's share of the total BTC locked.
- Early Vaults and Kintsugi Vaults receive more rewards as they take up higher risk in terms of protocol maturity.

Vault rewards distribution

Merge iBTC vs kBTC

- Interlay wants to open an XCM channel with Acala.
- This will allow for transfers and cross-chain developments in DeFi.
- Opening this channel will create potential applications and use cases.
- Interlay is seeking community feedback on any arguments against opening the channel.
- If there is no strong opposition, Interlay will proceed to open the channel and fast track any needed proposals.

Open an XCM channel with Acala

- Interlay is ready to activate staking rewards for its token INTR.
- Staking means holding INTR to participate in voting and earn rewards.
- The more and longer INTR is staked, the more voting power and rewards a user receives.
- The staking user interface has been added to the Interlay Dapp to make it easy for users to stake and participate in governance.
- The next step is to activate staking rewards via an on-chain governance proposal.

Discussions